2020 (10) TMI 1309 - Tri - Insolvency and Bankruptcy

Appointment of Independent Valuer for determination of fair value of shares - division of shares of group/family members with the Respondent No. 2 to 5 - Section 241-242 of the Companies Act, 2013/Section 397 398 of the Companies Act, 1956 - HELD THAT - Both the parties have agreed to part amicably as such for the betterment of the company. The parties are allowed to buyback their share/asset and release the company in favour of the party who is giving the higher offer. Since the Respondent is not satisfied with the valuation report and the Petitioner is ready to purchase the share of the company at mean value of 2 Independent Valuers of real estate appointed by both the parties which comes to ₹ 1247.27/- per equity share of Respondent 1 company and has further confirmed that he is ready to sell at the mean value and is ready to purchase at 5% above the mean value which comes to ₹ 1309.63 per share. It is found expedient to direct both the parties to quote their offer price independently in a sealed cover before this Tribunal so as the higher offeror be allowed to purchase the share and part with the company amicably - both sides are given 15 days time to submit their offer before this Tribunal and accordingly, the matter is listed on 13.11.2020 for compliance of the direction so passed - application disposed off.

Summary

Issues:
1. Appointment of Independent Valuer for determining fair value of shares of a company.
2. Dispute regarding the valuation report submitted by the Independent Valuer.
3. Request to rectify a patent error in the valuation process.
4. Submissions by the parties regarding the fair value of equity shares.
5. Consideration of valuation reports by government-approved valuers.
6. Agreement between parties to part amicably and buy back shares.

Analysis:
1. The judgment involves an application for the appointment of an Independent Valuer to determine the fair value of shares of a company for shareholding division among parties in compliance with a previous tribunal order. The Independent Valuer was appointed by the tribunal to assess the value of equity shares, and the valuation report determined the fair value per share at ?471.38.

2. Dispute arose when Respondents pointed out a patent error in the valuation process related to the application of Jantri rates for immovable properties. They requested the tribunal to rectify the error and recalculate the fair value, suggesting that the correct Jantri rate would result in a lower value per share of not more than ?426.38.

3. Parties submitted their arguments regarding the valuation report, with the Applicant challenging the valuation based on Jantri rates and proposing to set aside the report. The Applicant also suggested considering the mean value from two independent valuers' reports for real estate, offering to purchase shares at ?1247.27 per share.

4. The tribunal considered valuation reports from government-approved valuers appointed by both parties for three immovable properties of the company. After reviewing submissions and objections, the tribunal noted the agreement between parties to part amicably and buy back shares based on the higher offer price.

5. Given the agreement to part amicably, the tribunal directed both parties to independently submit their offer prices in sealed covers for the higher offeror to purchase the shares and facilitate an amicable resolution. The parties were given 15 days to submit their offers, with a compliance date set for further proceedings.

6. Consequently, the tribunal disposed of the application with the above observations, emphasizing no order as to costs, and scheduled the matter for compliance on a specified date. The judgment highlights the importance of fair valuation in resolving disputes and promoting amicable solutions among parties involved in shareholding matters.